Winter Fuel Payments (Hansard, 18 May 1998)

§ Mr. Denham

Winter Fuel payments are one of a number of initiatives the Government have taken to help vulnerable people, especially the elderly, keep warm in the winter. A total of £400 million has been committed for two years (1997/98 and 1998/99), to help pensioners with fuel bills to pay. This is the first time any Government have provided automatic help to over 7 million pensioner households with fuel bills to pay, living in the United Kingdom, who receive a Retirement Pension or one of a number of other qualifying benefits.

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The making of this year's payments has been an enormous and unprecedented exercise. In order to establish all eligible pensioners, correctly identify pensioner households, and determine the amount each should receive, it was necessary to correlate data in around 15 million computer records, involving 15 qualifying benefits, across nine computer systems. Overall, almost ten million pensioners, in over seven million households, have received a payment.

The administration of winter fuel payments is a matter for Peter Mathison, Chief Executive of the Benefits Agency. He will write to the hon. Member.

Letter from Peter Mathison to Mr. Nick Gibb, dated 14 May 1998: The Secretary of State has asked me to reply to your recent parliamentary questions about the winter fuel payments scheme. The making of Winter Fuel Payments to almost ten million eligible pensioners, in over seven million households, before the end of March 1998, has been a challenging task for the Benefits Agency (BA). This was achieved whilst maintaining normal benefit business. Around one and a half million of the poorest pensioners, those receiving Income Support or income-based Jobseeker's Allowance, received their payment of £50 during January. Almost eight and a half million other eligible pensioners, for example those in receipt of state Retirement Pension, were issued with a payment of £20 or £10. The issue of these payments was completed by 24 March 1998. Around £200 million was paid to help pensioners with their fuel bills last winter. The total administrative cost is expected to be around £20 million. We are aware of 649 eligible pensioners who received two £50 payments. This includes 211 who erroneously received two payments due to being in receipt of both Income Support and income-based Jobseeker's Allowance for at least one day in the qualifying week. In accordance with legislation, only one payment should have been made. Also, due to a computer operator error, 40,801 invalid girocheques were sent out with an incorrect date of issue. The error was quickly identified and all the invalid payments were replaced within 72 hours. The letter which accompanied the replacement payment apologised for the error and advised the recipient to destroy the invalid girocheque or if they had encashed it, to return the replacement to the nearest Benefits Agency office. It appears that in 438 instances both the invalid and replacement girocheque were cashed. In addition we are aware that 9,357 £50 payments have been made to customers who were not entitled to them. This means that 10,006 incorrect payments, valued at £500,300, were made in error. This represents 0.7% of the total number of £50 payments made. No information is presently available on the other eligible pensioners who received either a £10 or £20 payment. Action is being taken in each individual case to consider whether recovery action is appropriate. We will write to individuals who were overpaid informing them of the position and inviting repayment. Until this exercise is complete, we will not know how much has been repaid. I hope that this clarifies the position.